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ExxonMobil yet to make final investment decision on pipeline for Gas-to-Energy project
Six months after receiving Permit…
Kaieteur News – ExxonMobil Guyana- Esso Exploration and Production Guyana Limited (EEPGL)- received an environmental Permit to commence the pipeline aspect of the Gas-to-Energy (GTE) project six months ago, but to date, the company is yet to make a Final Investment Decision (FID) regarding the initiative.
ExxonMobil Guyana President, Alistair Routledge
During its most recent press conference on May 19, President of ExxonMobil Guyana, Alistair Routledge was asked whether the FID has been made. This is critical in determining the final cost of the project. However, Routledge said Exxon has not yet reached a conclusion.
He explained: “you may be aware the early works have been proceeding as we all committed that we wanted to ensure that we did the early works in order to preserve the startup schedule to be ready within the targeted 2024.”
The Exxon representative also went on to point out, “What drives the final investment decision is formalising all the documents, the field development plans, revisions for the Liza Field- Phase One and Two- and making sure all of the commercial agreements are in place.”
Several contracts to date have been awarded for the project, but according to Routledge there are still other outstanding areas to be covered before the FID is finalised. To this end, he said the government is “making sure that there is sufficient lengths of the project life to provide the gas that supports the project,” adding that the administration “has decided that in order to confirm the 10-year extension of the Liza production license it feels it needs to take that to Parliament and so that is the last step that is being worked on by the government.”
Government anticipates that the pipeline will cost about US$1.1 billion. The project will be funded by Exxon and repaid by Guyana over a 20-years period. Two citizens on March 27, 2023 filed legal proceedings in the High Court challenging the Permit granted to EEPGL for the pipeline. They have requested an Order to quash the approval for the project granted by the Environmental Protection Agency (EPA) on November 25, 2022 on the grounds that the decision was in breach of the provisions of the Environmental Protection Act (Cap. 20:05), and more particularly, the Environmental Protection (Authorisation) Regulations.
Reports indicate that the 12-inch pipeline to transport the natural gas has already arrived in Guyana. In the meantime, the government is pursuing a Natural Gas Liquids (NGL) facility to treat and separate the resource for use in the 300-megawatt power plant.
Currently, the government is seeking a loan from the United States Export Import (USEXIM) Bank to finance the two latter aspects of the project. The administration anticipates startup of the GTE initiative by the end of 2024.
Even in the absence of the final cost of the project, government believes the project will be feasible and reduce the cost of electricity by 50 percent.
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